This subproject is one of many research subprojects utilizing the resources provided by a Center grant funded by NIH/NCRR. The subproject and investigator (PI) may have received primary funding from another NIH source, and thus could be represented in other CRISP entries. The institution listed is for the Center, which is not necessarily the institution for the investigator. Embryonic stem (ES) cells are pluripotent cells that can differentiate into all three main germ layers: endoderm, mesoderm, and ectoderm. A number of methods have been developed to differentiate ES cells into specific cell types in culture. The methods that have been primarily employed in the directed differentiation of ES cells rely on the generation of three-dimensional ES cell aggregates called embryoid bodies (EBs). One inherent limitation of this procedure is the low efficiency of ES cell differentiation due to the formation of cavitated or cystic EB. This cavitation is produced by cell death at the EB core due to a decrease in diffusion of nutrients into the deeper cell layers of the embryoids. We hypothesize that an increase in both nutrient diffusion and cellular waste into and out the EBs, respectively, may result in a high efficiency of ES cell differentiation. To test this hypothesis, we have encapsulated the ES cells inalginate-based hydrogels and examined the efficiency of neuronal differentiation after microgravity culture for 8 days. Our results indicate that encapsulation of mES cells prior to cell aggregation resulted in a 2-fold increase in neuronal differentiation efficiency as compared to that obtained from normal EBs culture. For future studies, we will seed the differentiated cells, obtained from encapsulation, into biodegradable scaffolds suitable for future therapeutic applications.